The Reliability Principle States That Assets and Services Should Be

question 128

True/False

The reliability principle states that assets and services should be recorded at their actual cost,since cost is a reliable measure to use in financial accounting.

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Definitions:

Reverse Stock Split

A corporate action in which a company decreases the number of its existing shares, which increases the share price proportionally, often done to meet stock exchange listing requirements.

Equity

The value of ownership interest in a company, calculated as the difference between its assets and liabilities.

Share Repurchase

A program by which a company buys back its own shares from the marketplace, reducing the amount of outstanding stock.